Updated: Jul 29, 2020
COVID-19 unleashed dozens of operational challenges, forcing PE leadership to juggle time-sensitive priorities, from security risks to workforce productivity, resilience issues, and more. Insufficient IT plans, however, are nothing new. For years, IT shortcomings have cracked your business foundations; the pandemic simply provided the right amount of pressure to uncover these weak defenses. Moving forward, here's what you need to know about where your portfolio company's IT stands.
In the face of this eruption, PE leadership wants to build stronger, more resilient IT strategies, and fast. COVID has pushed portfolio companies to make sudden changes and test IT in ways like never before. Through this sharp learning curve, we’re one step closer to reaching the other side of the race towards cost-optimized, high-performing IT. But how do we get there seamlessly?
As the mid-market acts quickly to determine the best route to resolution, IT must rethink the ways in which they adopt and deploy technology efficiently. In applying lessons learned from COVID, we’ve created a roadmap to help you implement sustainable, resilient IT plans for the future. With a stronger IT foundation, your portfolio companies can withstand whatever future disruptions come your way, no matter how big.
Exposing the IT Cracks in Your Foundation:
All businesses have been impacted by COVID, and while PE leadership struggles to build stronger defenses, we’ve taken note of some of the most common IT and financial flaws uncovered by the pandemic.
Collaboration Challenges: Once businesses made the leap to remote work, employees and systems struggled to find a safe and secure way to make the jump without falling victim to security and productivity gaps. It became abundantly clear early on that remote access systems didn’t work, leaving collaboration and team productivity severely limited.
Disaster Recovery: Disaster recovery plans have always been an essential part of running operations, but COVID showed that most mid-market companies overestimated their Disaster Recovery plans. Systems, operations, and services were impacted, and without a proper Disaster Recovery plan in place, disruptions such as outages, data loss, security vulnerabilities, and more threatened entire business operations. IT just wasn’t ready for this major disaster.
Security Exposure: According to a report from Microsoft, COVID-19 themed attacks peaked in the month of March, with over 5 million cyberattacks in the first week alone. Due to the lack of security controls in the remote workforce, users were separated, unprepared, and exposed, clients and vendors didn’t trust their suppliers, and some businesses even cut cybersecurity budgets to help tackle the crisis. Without question, the cracks in security and IT strategy have only grown deeper and more widespread with the shift to remote work.
Slow Organizational Decision-Making: Without quick and efficient change in the face of COVID, many PE firms lost their footing. What’s needed is easy access to usable data, but ERPs and supporting systems weren’t adapted to the impact of COVID. Not to mention, leadership teams have failed to embrace new technology and data, and the new collaboration tools needed to ensure success got lost behind slow-moving hierarchies. Positive outcomes for technology and people will not be realized without a new operating model, where leaders make quick decisions, reimagine structure, and deploy tools that deliver measurable value.
Cost Cutting: Mass layoffs due to the pandemic posed a significant challenge to IT professionals. As companies downsized, IT struggled to keep businesses running smoothly and securely while also identifying areas to cut costs, which often left the company more exposed than ever.
Investment Visibility: Firms have used this period to invest in their companies, but with the significant increase in cyberattacks and failed recovery strategies, they question current IT priorities. Rather than shying away from IT in the future, businesses need to invest in scalable, agile procedures that provide full visibility into security and productivity for the entire organization.
Cloud Strategy Shortcomings: Sudden runaway costs or outages exposed poorly executed cloud or data center strategies, contributing to the overall lack of confidence that PE has in their IT investments. Without comprehensive, resilient Cloud management, data loss and security issues continue to threaten and weaken your business foundation.
Misaligned Priorities: PE firms want to move fast, but knowing what to focus on first is unclear. The quickest and best route to agile, resilient IT is to cultivate speedy decision-making and excellent execution plans that enable the right structures, processes, and culture.
3 Steps to Paving Stronger IT
Confronting the cracks in your business foundation may seem daunting at first, but there are hundreds of effective, cost-optimized tools at your disposal. COVID-19 forced PE leaders to reinvent how they work, but some of the fastest, most reliable solutions have been there for us for years: now is the time to start using them correctly.
1. Rebuild Your Foundation Now with Cloud Computing. Cloud computing is perhaps the most crucial step to enabling businesses. Even before COVID-19, a technological shift towards cloud computing was well underway; however, we need the Cloud now more than ever. Businesses who rely on cloud strategy will be the first to overcome connectivity challenges, provide access to shareable data with self-service provisioning and on-demand administration, and stay resilient in the aftermath of COVID-19. Enabled platforms like Microsoft Teams, for example, have been key in sustaining productivity in our remote workforce, and email in the cloud –with 2-factor authentication—gives you easy access while also allowing users to work away from on-premise data centers. All in all, when implemented correctly, the Cloud can facilitate positive outcomes during the pandemic and will remain critical for business continuity in the post-COVID era.
2. Patch Up Any Gaps with a Health Check. An important question to ask when building a stronger, more resilient foundation for your business in the post-COVID era is “where are my IT investments and how can I cut costs?” In the midst of the pandemic, many mid-market companies increased IT spending in reaction to the crisis, investing in on-premise data centers instead of the cloud. In the future, IT leadership will soon find that these improvement initiatives result in high-cost, low-performance IT. Instead, when evaluating divestiture and M&A opportunities, PE firms need to rely on cloud strategy and execution for incremental scaling abilities, saving money in the long run and building confidence in your IT.
3. Stay Secure with End User Security Training. As we saw earlier, COVID-19 related scams are on the rise, and remote work has provided a huge opening for cybercriminals. In order to prevent phishing attacks and other dangerous breaches, it’s essential that your users are prepared to keep themselves and your network safe under remote circumstances. Security awareness leaders should conduct phish testing, create ransomware prevention reviews and backups, and provide security guides to help employees during this time of uncertainty. If you’d like to know more about how to prevent cyberattacks for your portfolio companies, check out our Wire Fraud Webinar.
Achieving Long-term Sustainability
While we hope to see the end of COVID-19 soon, the impact of this pandemic will continue to linger for the foreseeable future. Looking ahead, remote work might become the new norm, so it’s crucial that the plans you put in place to protect your portfolio companies now can also scale to the future. Some key, proactive steps to achieving long-term sustainability include aligning IT to business goals, increasing IT visibility, revamping your operating model, investing in technical health checks, and budgeting for and investing in ongoing maintenance and talent. Proactive, resilient response plans with these tips in mind will inevitably alleviate financial burdens in the future and position your portfolio companies for exceptional growth.
If you want more information on how to help your leadership build strong IT, check out these helpful resources:
1. Check out our webinar on how to protect new deals from wire fraud.
3. Read more about the latest in Private Equity, Security, Cloud Computing, and more here: https://www.rkonpe.com/blog
As a leading IT advisory practice, our team has deep consulting and execution expertise in digital transformation, security, cloud management, and more. Our industry experience is rooted in our passion, integrity, and commitment to finding the best possible IT solutions for our clients. Learn more here.